• Looking Through The Smoke

    Posted on April 10, 2020 by Gemmer Asset

    Printable VersionThere have been 10 bear markets in the S&P 500 since 1950 (defined here as a -20% drawdown in the index price from a market high). The below chart shows the historical drawdowns in the index:     Pretty scary huh? Let’s add to the chart and show the subsequent bull markets:     Really puts those drawdowns in perspective doesn’t it? If you include dividends in the December 1987-March 2000 period, the gain…
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  • Market Recap

    Posted on April 3, 2020 by Gemmer Asset

    Printable Version   Flying Blind   The fact that the economic data is starting to turn down surprises no one. As Bank Credit Analyst notes:   “One thing is certain. Economic activity around the world faces its biggest contraction in modern times. Declines in second quarter GDP will be mind-numbingly bad in a wide range of countries, especially those that have instituted lockdowns and the closure of non-essential businesses. According to the OECD, the median…
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  • Through the Looking Glass

    Posted on by Gemmer Asset

    Printable VersionOver the past week, my five-year-old daughter and I have been reading through Lewis Carol’s “Alice’s Adventures in Wonderland.” We just started chapter five – where Alice stumbles upon the caterpillar who asks “Who are you?.” Alice replies:   “ I–I hardly know, sir, just at present– at least I know who I was when I got up this morning, but I think I must have been changed several times since then.”   This…
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  • Market Recap

    Posted on March 27, 2020 by Gemmer Asset

    Printable Version   From Bear to Bull in a Week   Another wild week. The sharpest, fastest bear market in history – the S&P 500 was down -35.2% from its closing high on February 19 to the intraday low on Monday – was followed by the sharpest, fastest move back into bull market territory in history, as the index rallied +20% from that point through yesterday’s close. Both Tuesday and the past three days were…
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  • Good Time To Revisit How an ETF Works

    Posted on by Gemmer Asset

    Printable VersionBull and bear markets are funny things. When the markets are soaring, no one seems to ask many questions and if they do, they don’t dig too deep. During big downturns, everyone is asking questions and trying to figure out how various financial instruments actually work. Given all the chaos recently, we thought it would be a good time to revisit how ETFs work and discuss how volatility exposes some unique characteristics of this…
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  • Market Recap

    Posted on March 20, 2020 by Gemmer Asset

    Printable Version   Where to Begin?   Most importantly, all of us at Gemmer hope you and your family are healthy and doing as well as can be expected. Everyone here is working hard during this ‘shelter in place’ period and our backup plan to work remotely is functioning better than we could have expected. We were fully operational day 1!   Secondly, you may see trade confirms coming through in the coming days. We…
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  • Market Recap

    Posted on March 6, 2020 by Gemmer Asset

    Printable Version   V, U, or L scenario?   What a crazy week. What can you say about a week that saw the following daily S&P 500 returns: Monday +4.6%, Tuesday -2.8%, Wednesday +4.2%, Thursday -3.4%, and Friday -1.7%? And after all this the S&P finished up +0.6% for the week. Who’d of thought?   Normally we’d get into today’s strong payrolls report and how the economy had built up a decent head of steam…
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  • Markets Grapple With The Coronavirus

    Posted on February 28, 2020 by Gemmer Asset

    Printable VersionMarkets Grapple with the Coronavirus   There’s an old saying that markets take the escalator up and the elevator down. That sure was the case this week. Selling pressure was intense all week as investors grappled with the implications of the coronavirus spreading beyond China’s boarders. The S&P officially hit correction territory with a decline of more than 10% from the high. As you can see below, this is the eighth correction of more…
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  • Market Recap

    Posted on February 21, 2020 by Gemmer Asset

    Printable Version    Gauging the Economic Fallout   Up until Thursday the markets remained pretty buoyant in expectation that the Coronavirus infection rate had peaked. This seemed to change on Thursday and Friday as attention turned away from infections towards the economic fallout.   The change of tone could be detected after Japan reported a miserable fourth quarter GDP number. Growth in the fourth quarter fell at an annual rate of -6.3% (chart below) after…
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  • Market Recap

    Posted on February 14, 2020 by Gemmer Asset

    Printable Version   Infection Rates Seem to be Slowing   As you would expect the coronavirus situation was the headline story all week. The situation continues to evolve, but it is pretty clear that simply counting the number of infections is far from simple. Is China fully disclosing the number infected? If infection rates have plateaued, why are roughly 400mm people in China under some form or quarantine? Investors were also thrown off balance on…
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